Camila Russo, founder of The Defiant and author of a new book on Ethereum, “The Infinite Machine,” speaks about how currency controls in Argentina got her interested in crypto and explains why she chose to tell the Ethereum story. She discusses:
- how she started covering the crypto space
- what it was like living through currency controls in Argentina
- why she started focusing on Ethereum instead of Bitcoin
- what’s in her new book, The Infinite Machine
- the most pivotal moments in Ethereum’s history
- possible risks to Ethereum 2.0 because of delays
- whether competing protocols could take market share away from Ethereum
- the most surprising aspect of the Ethereum story
- starting her own DeFi-focused media platform, The Defiant
- why she launched ‘CAMI’ tokens and how they are used
- the significance of ERC-20 tokens having a higher market cap than ETH
- her predictions about trends and promising projects in the DeFi space
Thank you to our sponsors!
Crypto.com: https://www.crypto.comTezos: https://tquorum.com/
Episode links:
Camila Russo: https://twitter.com/CamiRusso
The Infinite Machine: https://www.harpercollins.com/products/the-infinite-machine-camila-russo
The Defiant: https://thedefiant.substack.com/
Excerpt from The Infinite Machine on CoinDesk: https://www.coindesk.com/sale-of-the-century-the-inside-story-of-ethereums-2014-premine
Decrypt review: https://decrypt.co/35466/the-incredible-story-of-ethereum-the-infinite-machine
Camila on what Ethereum has accomplished in five years: https://www.coindesk.com/five-years-on-ethereum-really-is-the-minecraft-of-crypto-finance
Hidden Forces podcast with Camila: https://podcasts.apple.com/us/podcast/rise-ethereum-future-defi-transformation-crypto-media/id1205359334?i=1000484635053
Camila in the Keen On podcast: https://lithub.com/camila-russo-on-ethereum-and-the-future-of-the-internet/
Ethereum 2.0 phase 0 may not go live until 2021: https://www.theblockcrypto.com/linked/71155/eth-2-phase-0-ama-2021
Transcription:
Laura Shin:
Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I’m your host, Laura Shin. Subscribe to Unchained on YouTube where you can watch the videos of me and my guests. Go to youtube.com/c/unchainedpodcast and subscribe today.
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Laura Shin:
Today’s guest is Camila Russo, author of The Infinite Machine, how an army of crypto hackers is building the next internet with Ethereum, and founder of The Defiant. Welcome, Camila.
Camila Russo:
Hi, Laura. Thanks so much for having me. Excited to be here.
Laura Shin:
I just want to say first of all congrats on the publication of your book. That must be so exciting.
Camila Russo:
It is. I’m so happy with it, so happy with all the feedback. It’s been amazing.
Laura Shin:
So let’s start with your background. You’ve done so much in crypto, but I don’t know if people really know how you got started, so how did you come to be covering this space?
Camila Russo:
Sure. So, well, before being full-time crypto with The Defiant and The Infinite Machine I was a reporter at Bloomberg News for around eight years. I started in an internship in New York, then I went to Argentina for over four years, then Madrid, and then back to New York.
And in Argentina I was there in Cristina Fernández’s second term and at that time she imposed really harsh currency controls and inflation is always in Argentina, it was you know in the double digits. And so, I was covering Argentine markets and how people were protecting against inflation and currency controls, and that’s how I came across Bitcoin for the first time in 2013.
So, I wrote a story on Bloomberg on how Argentines were using this digital currency to protect again inflation, and after that I was like always really interested in crypto, you know? It to me was like a really powerful concept, this idea of having a parallel and independent financial and monetary system, especially after living in Argentina and living through all that it made a lot of sense to me so I always kind of kept track of it.
But then I was back in New York in 2017 when I started really covering it again and focusing more on it. So at this time I was at Bloomberg’s market slide blog which is kind of a live feed of market analysis, and I mostly covered emerging markets, but I had the freedom of…to write whatever looked interesting.
And 2017 was obviously huge for crypto so I started writing about crypto, and then started writing for like the General Wire because Bloomberg didn’t have like dedicated cryptocurrency reporters or a dedicated crypto team, so I became kind of the de facto crypto reporter at the time and that kind of dragged me into the space. I had a front row view of the huge bubble of 2017 and I just, you know, was fascinated by it. I kind of never left after that.
Laura Shin:
And earlier when you said that having lived through the currency controls in Argentina that that was part of the reason that you got fascinated with Bitcoin. What was it like living through that? What did you experience and why was it that you felt that Bitcoin was related to what was happening then?
Camila Russo:
Yeah, so it was really interesting to be living through that because I’m Chilean, and in Chile the situation was very different. Chile is a much more conservative country like fiscally and in its monetary policy, like nothing ever happens there. The Chilean peso is really stable.
So coming to Argentina where you know there were all these like stimulus and like money printing and just like very populist policies with the Kirchners, and just living through currency controls like firsthand. Because I was earning in Argentine pesos, like Bloomberg they pay journalists there in their local currency, and they do that in every local bureau. You get paid in obviously the country’s currency, so I got paid in Argentine pesos.
And when I first got to Argentina the first thing I was told was as soon as you get your salary change it to dollars because of the huge inflation. So, what happens with inflation in practice is that you get say 100 Argentine pesos in January and that lets you buy a certain amount of stuff, but then at the end of the year you can buy much less with the same 100 pesos.
So, effectively you become poorer by holding your local currency so that’s why people in Argentina and countries with really high inflation are always seeking a more stable currency and that’s usually US dollars. So, that’s what I was doing. As soon as I got my salary in pesos I exchange it to dollars.
And then one day I think it was like, just a couple days after Cristina Fernández got reelected, I was at the Bloomberg office kind of covering this announcement where she said, you know, now US dollar purchases are prohibited, and it was like, okay, like I covered it, but then I went to my bank account to see like actually I wasn’t able to trade pesos for dollars anymore and that option was just gone from my bank. So I really kind of lived that.
And then I was like stuck with Argentine pesos and having to go to the black market, and like the US dollar black market in Argentina is like…it’s illegal, but it’s like everyone does it, like everyone is using it and it’s just crazy. So people were doing like all these like schemes to try to get access to dollars, like they would go overnight to Uruguay and like cash casino chips for dollars, and like do all this crazy stuff including like Bitcoin.
So, and yeah, like just seeing how frustrating it is to have a government dictate what you can and can’t do with your own money, and you know banks like prohibiting and enforcing those laws and regulations. It was just amazing to me, like it just didn’t make any sense. It was like this is my money, I earned it, like why are they telling me I can’t buy dollars with it, like especially because the reason why the pesos being devalued is their fault so why do I have to pay for that, right?
It just felt like so insane. And so, yeah, the ability to have a hedge against crazy governments and irresponsible policies was just groundbreaking, and yeah, I think that’s what Bitcoin enables.
Laura Shin:
So, but something that’s so fascinating to me is that I obviously can see how your experience in Argentina would get you interested in Bitcoin, and I’ve seen this…pretty much the same story happen with people like Wences Casares and Michael Casey, who lived in Argentina. It just feels like, you know, that Mario Conti, everybody who has experience with Argentina somehow finds their way to the crypto space. But why do you think that you instead ended up focusing on Ethereum rather than Bitcoin?
Camila Russo:
Yeah. So, I think like the reason is like a practical one, as well as like not ideological one, but like one that’s like focused on Ethereum itself. So the practical reason was that end of 2017 I thought what happened this year is crazy and it needs to be documented, like this is an incredible space, and I had always wanted to write a book, a nonfiction book, so I was like on the lookout for like what interesting stories I could tell, and so crypto was to me like that opportunity to tell an interesting story in a book.
And so, I just started thinking what’s the most interesting story in crypto that hasn’t been told? And the story of Bitcoin had been told before really well I thought with Digital Gold and other books, and it was just more widely known. But Ethereum, you know, people didn’t really know much about it beyond, you know, it’s a platform for ICOs.
There was no history of Ethereum which was crazy. It was the second biggest cryptocurrency, it fueled much of the craziness of 2017 yet nobody knew much about it and how it got created and started, so that’s the reason I started looking at writing a book on Ethereum. And then after my kind of initial research I realized it is really a book-worthy project because while Bitcoin tries to do peer-to-peer money, Ethereum wants to do peer-to-peer everything, like go beyond just the peer-to-peer transfer of money with smart contracts.
So to me, it was whether Ethereum ends out winning or succeeding in its goal of becoming like for world computer. It’s still one in the sense that it was the first to try this, to push blockchain technology forward, and so I thought that was a story worth telling.
Laura Shin:
And at some point you also left Bloomberg. When was that and why did you decide to leave Bloomberg?
Camila Russo:
Yeah. So, I left Bloomberg January of 2019 and I left in part because I really wanted to focus on finishing my book. So Bloomberg gave me a few months of book leave and that was amazing, I’m really grateful to them. But then the beginning of 2019 I had to go back to Bloomberg and do like my full-time reporting job, and I still hadn’t finished writing the book, and so I just like couldn’t see like how I would be able to do both well and I didn’t want to delay publishing my book. So, that was like one side of the decision.
And then the other side was just, you know, I was there for eight years, I covered so many different markets. I was at three or four different Bloomberg offices, if you count like sometime I was also in the Chile office, so I had like a lot of experience covering financial news for Bloomberg, and I just thought it’s time to do something else.
I was excited to freelance, to maybe start something on my own, like I left without a clear idea of what I would do after finishing the book, but I knew I wanted a little bit more freedom to explore other things after like all that time at Bloomberg.
Laura Shin:
And so, you did start talking a little bit about your book, but why don’t we just dive into the particulars. What is your book about?
Camila Russo:
So, yeah, my book focuses on the history of Ethereum, especially the early days, so how Vitalik came up with the idea of Ethereum, how he inspired a group of very diverse characters from different walks of life to follow him in this journey of building this new platform, the challenges they face, how they overcame them, and then the 2017 boom and bust in 2018.
And then also, I come to pretty much present day kind of hinting about like the future of Ethereum with DeFi and Web 3, but really the focus is on the early days and how Ethereum got started and launched.
Laura Shin:
And so, what would you say were the most pivotal moments in Ethereum history?
Camila Russo:
Yeah, so, let’s see. I think first at the beginning of Ethereum history there was this tension on whether like, on the very kind of soul of Ethereum, whether it should be a for-profit company or a nonprofit foundation fueling development of like this open public blockchain. And so, I think the moment that the decision to make it a nonprofit foundation obviously really defined Ethereum going forward, so that was definitely a pivotal moment.
Another key moment I think was the presale, ICO premined, however you want to call it, you know, the decision to structure the distribution of ether in this way with a presale instead of just by, you know, proof of work mining like Bitcoin, so Ethereum must have been really criticized for this.
After that it’s always phase kind of had this kind of, sort of damocles hanging over its heads with like regulators on whether this was actual, a legal like this is a securities offering or not, like that was always in doubt until recently. So I think that was another kind of big moment for it, like that decision to do ether distribution that way, and also like deciding to do it in the US, and you know that took a huge amount of time with lawyers to decide all the like specifics of the sale.
Also, big but I think less known is the Shanghai test. So Ethereum went through kind of this phase of like huge tests with, and one was the Shanghai test when it was seeing these denial-of-service attacks and like spam from hackers for like an entire month, and then right after that came the DOA hack. So it was like a really intense period of like huge tests to the network, so I think these two kind of attacks were like pivotal moments as well. And yeah, it kind of like made Ethereum feel I think kind of more war tested after that happened.
Laura Shin:
Yeah. And just it was reversed that the DOA happened first and then the DDoS attacks were shortly thereafter.
Camila Russo:
Oh.
Laura Shin:
Yeah. So as we approach the five-year anniversary of the Ethereum networking live, how would you characterize where Ethereum is now?
Camila Russo:
Well, I think it’s been incredible to see the progress of Ethereum since when I first started writing the book until now. So when I first started writing the, like I mentioned, it was like the main thing were, you know, how ICOs and like enabling this fundraising mechanism, but now it’s really enabling this more complex and like sophisticated financial system that goes beyond just fundraising and into lending, borrowing, exchanging, and you know use cases that we never would have imagined on Ethereum.
So, I think that the birth of this new financial system is kind of proving that Ethereum is doing what it set out to do, to be this layer for an unlimited number of applications built on top of it.
Laura Shin:
And so, at this point everybody’s waiting for the launch of Phase Zero of Ethereum 2.0, and there was some chatter recently about the fact that that might be delayed until 2021 rather than coming out later this year. Do you see any risks to Ethereum due to these delays?
Camila Russo:
Risks? I don’t think so because it’s like Ethereum has been waiting for Proof-of-Stake and it too seems like forever. It’s basically been the thing that they’ve been working towards since I think like 2016 or so, like Proof-of-Stake is coming, proof of you know. So, and it’s been able to continue going forward even with all these delays, and I think now it’s at a stronger place than ever to keep surviving even without ETH 2.
Layer 2 solutions are in a really good place, like they’re actually working. You know, there’s actual DEXes using zero-knowledge proofs and optimistic rollups. And ONG Network launched recently with its plasma chain. So you know, Layer 2 scaling is actually a reality, and I think that will really help bridge that gap between ETH 1 and ETH 2.
So for that reason, and also for the fact that right now the way that users are using Ethereum, it’s been more of like whales using these financial platforms to transact, and so far it hasn’t required, you know, that much scaling. I mean it has put Ethereum to the test with like gas prices rising and the network occasionally being clogged up, but it’s not as bad as like CryptoKitties and like thousands of people just piling on, or even like as crazy as the ICO days. I think it’s like a much more measured use case of not like so many people using it at once, but it’s like a more sustainable way of like transacting.
So between those things I think, you know, Ethereum is in good shape to continue working well until ETH 2 comes. So, we’ll see. I still…you know, I’m not sure whether Proof-of-Stake will launch this year or next year, but yeah. There has been some…I mean Vitalik is really kind of pushing for a launch this year and like other like prominent developers are too, so we’ll see what happens. But I think it’s a good sign that they’re focused on having it done like well instead of like just pushing out something that’s not ready.
Laura Shin:
Are you watching any of these other competing Layer One protocols that used to be dubbed Ethereum killers…
Camila Russo:
Yeah.
Laura Shin:
…but people haven’t been using that term so much anymore. And do you think any of them have a chance of taking any market share from Ethereum?
Camila Russo:
Possibly, yes. It’s hard to say. I think so far we can comment on what’s happened, and so far it’s been really hard to compete with Ethereum. I think Ethereum has a really great advantage of like a first-mover advantage with a huge community, like there’s, I don’t know, like thousands of developers building on Ethereum. I think they’re supporting that there are even more Ethereum developers and Bitcoin developers.
And just the level of connectivity between Ethereum applications will be really hard to replicate because of there is like complexability of DeFi and other applications that they all start working with each other. It makes it harder for a single application to move to another chain and just be there by itself, so there’s kind of these network effects, the communities are there, builders are there, users are there, so it’s been really hard to compete.
But that’s not to say that, you know, any of these new chains launches and it’s just like many, many times better than Ethereum technically, and ETH 2 keeps being delayed, and maybe Layer 2 solutions aren’t fixing it, aren’t fixing scaling as people hoped, then yeah, I mean they very well could start taking market share. We’ll see.
Laura Shin:
And other than that, are there any other obstacles that you think Ethereum faces?
Camila Russo:
I think regulation is always like…it’s always a risk, especially if Ethereum’s main focus is finance, you know, regulators are always going to be watching that closely. I think that they haven’t yet because it’s still, like DeFi is still pretty small, but you know, with two billion now it’s not nothing.
I think what kind of protects it a little bit is that so far it’s really been crypto whales playing in these platforms, so you’re not seeing kind of inexperienced retail users getting burned, but if we have some sort of like ICO boom type of frenzy where retail traders come to DeFi like to yield farm and they are paying 100 bucks of gas fees and getting wrecked with their leveraged loans, you could see kind of regulators raising their eyebrows and taking a closer look at this. So, I think that’s one risk.
But I think what happened with ICOs and what’s happened in general with Ethereum and blockchain technology is that at least in the US regulators realize that they have taken this kind of soft touch to allow innovation to flourish because they really…I don’t think they want to stamp out this industry and have everyone go somewhere else and like, I don’t know, maybe China having like the center of blockchain innovation.
So, I think what will likely happen is that there will be regulators looking closer at the space, maybe enforcing…sorry…enforcing some sort of like consumer protection, or it’ll have to be a give and take, but hopefully it won’t be so bad as to like really like prevent the system going forward.
Laura Shin:
You know one thing that interests me is when you said that the regulators have been having a light touch. There was a moment, I’m just trying to remember when this was…I think it was about a year ago where I feel like the frustration from US entrepreneurs with the regulators was sort of at a peak, and do you feel like that’s changed because I think at that time that’s when a lot of entrepreneurs were saying, oh, yeah, people are leaving to go to other jurisdictions. So do you think just that they were overreacting, or do you think that things have calmed down since then?
Camila Russo:
Yeah, I think that the peak kind of concern with regulators I think came with ICOs, and I think people were moving to other jurisdictions because US regulators really took a stance there that tokens can be securities and these sales are very, you know, probably securities, illegal securities offerings. So I think they were rightly kind of concerned that developers in the space, but I think that’s subsided now, first because ICOs aren’t being done in the same way anymore.
I think the space has matured and realized that the way fundraising was happening in Ethereum wasn’t really healthy. I don’t think the incentives were placed I the right way, like giving a team of entrepreneurs millions of dollars write-off just based off a white paper and website and expecting them to deliver everything they promised after you already gave them all your money, you know?
That didn’t really turn out very well in many cases, and others they did. And we have like really good teams who raise money in the ICO days like building right now, and some of the top DeFi projects raise money and they sell this, but many, many others they didn’t and…just like they didn’t do anything and ran off with the money. So I think the crypto space has really learned from that and matured and is seeking other more responsible ways to fundraise, and I think that’s helping with regulators as well.
Laura Shin:
And so, when you look back at all the history that you uncovered for your book and you look at how far Ethereum has come, what’s most surprising to you about the Ethereum story?
Camila Russo:
There were many surprising things. I think…so, okay, so one thing that was surprising was kind of this class of the like for-profit, nonprofit. The other is a pricing thing. To find out was just that right now Vitalik is the only one of the initial cofounders who is still building for Ethereum, and everyone has like gone off to do their own like other blockchain things or non-blockchain things, so that was also surprising.
I think, like I said too, watching this new kind of financial applications, ecosystem thrive right now in Ethereum after the bear market when everyone thought Ethereum was dead, has been like a really nice surprise as well. Yeah, I guess, yeah, those have been like the biggest surprises.
Laura Shin:
All right. So in a moment we will talk about The Defiant, DeFi, and Crypto Media, but first a quick word from the sponsors who make this show possible.
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Laura Shin:
Okay, back to my conversation with Camila Russo of The Defiant. So, tell us about The Defiant. What is it and what do you cover there?
Camila Russo:
Yeah. So The Defiant is a…well, it started out as a newsletter which I founded in June of last year so it is a little bit over a year, and I started this newsletter because like I said I was watching this incredible financial ecosystem being built on Ethereum and I really thought it wasn’t being covered at all, or at least very well, even by Crypto Media and much less by mainstream media.
There were hardly even any newsletter focusing on DeFi at the time when I started The Defiant. So, I really saw this incredible amount of innovation, growth, activity happening in the space and to me it was, you know, these developers are delivering kind of the dream of crypto, like the Cypher Punk dream of being your own bank and having your parallel financial system, and they’re actually building it and it’s working, and like nobody’s paying attention.
So to me it looks like it was an opportunity to come in and after researching and learning about Ethereum for my book, and also having covered markets for years at Bloomberg, I thought you know it’s a good space for me to come and cover, and I was just like fascinated by it.
So, I started this newsletter and at first I thought, you know, let me try to do it daily because I think that kind of helps build an audience of consistency, but without really knowing whether I’d have enough material or more would happen, but I just like…I started it and yeah, like there was so much going on that I never was lacking material to write a daily newsletter.
And it grew really quickly, like I had really good response to it. People were really needing this information, so it was for DeFi, so it kind of evolved into more of a…I want to make it into a media company for the open economy beyond just a newsletter. So, I recently launched a podcast as well, looking to start a YouTube channel soon, and I’m building kind of The Defiant website to like host all these things on, like in one place. So, yeah, that’s my idea with The Defiant, to build it into a trustworthy content platform for decentralized finance.
And I think kind of the difference with other newsletters and people covering the space is that I really do want to bring my kind of…my journalistic perspective to it. So, I’m covering the space from the perspective and with the expertise of a journalist, and I do have contributors who are also writing for The Defiant now, and I edit their pieces always with that in mind.
So, I’m obviously super bullish in this space and my bias will be towards, you know, this is amazing, but always keeping the objectivism and the standards of…that I had at Bloomberg, you know? Like I’m not going to stop reporting the bad things that happened, the scams, the hacks, and I think that’s especially important in such a nascent space. So, yeah.
Laura Shin:
And how would you compare doing financial coverage at Bloomberg to covering DeFi? How are they similar and how are they different?
Camila Russo:
Oh, my God. Let’s see. Well, they’re so different because…so, first of all, I think it’s obviously a much smaller market, so there’s less to cover, but at the same time it’s like one market. I do not…because okay, so…so DeFi’s just a global ecosystem and it’s like all part of the same thing, whereas in covering markets for Bloomberg you had like very separate markets.
So there’s emerging markets, developing markets. Within emerging markets you have like Brazil or like Latin America and Asia, and like each country has its own specific rules and systems and securities, and they’re all like in little cages, you know? But in DeFi because it’s like a global network it’s all one thing, so I think that’s a little bit different.
It’s also 24/7 so it’s not like at Bloomberg, you know, once the market closes you can kind of like go home and not worry about anything. In DeFi you can have hacks in the middle of the night like on weekends which is when they usually happen, you know? So it’s like, yeah, you need to be on all the time.
And I think this is, I don’t know, like very personal and more of like a colorful statement, but I enjoy covering this space more because I kind of can communicate better with the people building these things, like I can relate better to them. So, just to put it more concretely, covering financial markets at Bloomberg I was always in a room with like all men in suits in their like 50s or whatever, just like old white men in suits, and it just felt like…it was obviously just a job for them, like they didn’t really…there was like no passion for what they were doing.
And it’s so different covering crypto, you know, and especially covering Ethereum and the DeFi community, like it’s much more diverse. So obviously still male-dominated, but you still get women and female founders who are absolutely doing amazing stuff. It’s a lot younger crowd, and it’s so nice to be covering a space where people are actually passionate about what they’re doing. I mean and you can just, you know, see it, you know come across interviews and their products, they’re like really putting their hearts into this. So, yeah, I think that’s a big difference from covering traditional markets.
Laura Shin:
Yeah, I relate to you on so many different levels on everything you just said. And how would you say that launching and running your own Crypto Media company compares to working for traditional media?
Camila Russo:
Oh, I’ve been loving being my own boss so much. So, you know, when I left Bloomberg I always had like in the back of my mind that I would one day start my own thing, and you know when I was thinking of it I was like am I glamorizing being an entrepreneur and like starting, you know, having a startup? And actually, like, it’s been amazing, like I am…I really, you know, I’m glad that I took that step.
But it’s obviously very different because I’m doing everything. It’s like I’m covering, like I’m doing the journalism, I’m also doing the editing. I’m running kind of the infrastructure, like building the website, doing the podcast, like editing, like making sure, like talking to the substack people when the site is down, or you know like getting the crypto payment onboard, like all that kind of logistics that at Bloomberg there were like entire teams of people working, you know, I had like nothing to worry about, are all on me now.
But it’s really fun because it’s like I get to think of bigger things like the strategy and like where am I going to take this media platform, and like what does the future look like, and who do I partner with, like what sponsors did I take, you know like the business side of things which I had no experience with before and like now I’m doing, has been really fun to learn, and it’s exciting building my own thing.
So, you know, at Bloomberg I often stayed really late working on stories and it was fine, like it was still kind of my work that I was proud of to deliver a story, but now it’s like even better because it’s not just this one story, but it’s working towards my own thing, you know my own brand. So, yeah, I’ve really enjoyed the experience.
Laura Shin:
And so, you are working directly with your sponsors or are you trying to do the…
Camila Russo:
Yeah.
Laura Shin:
Oh, you are. Okay.
Camila Russo:
Yeah. Yeah. I took…I started taking sponsors in April, like late April.
Laura Shin:
Okay, but are you trying to do the church and state separation between business and editorial or…
Camila Russo:
Oh, yeah, definitely. I mean…
Laura Shin:
Oh, okay.
Camila Russo:
Yeah. Yeah. So I’m…I have sponsors who place kind of banners or logos at the top of the newsletter, but all the content, I mean that doesn’t affect the content. I’m still like covering the space as I would if I had no sponsors.
Laura Shin:
Oh, right, right. Yeah, but…yeah, I actually hired a separate person so I don’t even…
Camila Russo:
Oh, that’s good.
Laura Shin:
Yeah. Yeah. But…
Camila Russo:
Yeah, I should do that. That comes next.
Laura Shin:
Yeah. No, I’m right now hiring more on the editorial side, so I think you seem to have built that out first, but also I’m still working on my book. So, our timelines…we’re probably doing similar parallel track things, but on different timelines.
So, I was curious. Who are you finding as subscribing to The Defiant? Are they people who kind of already tend to be in the industry, or are you also getting people who are just interested in DeFi but don’t necessarily work in the space already?
Camila Russo:
So, at first I think it was mostly people in the industry. So, I had tons of VCs, like a lot of like the crypto funds subscribe to The Defiant. All of the like big DeFi projects and Ethereum projects subscribe to it, so I guess like developers from these projects and like team members subscribe, and also like just traders, like users of DeFi platforms are also subscribers.
But recently I’ve seen people who are like more like adjacent to DeFi and Ethereum subscribing as well, so not so into like the core. So yeah, I’ve seen, you know…I can tell from…I have this subscriber chat on Discord and sometimes people introduce themselves, and now I’m seeing more people who are just like, oh, I’m just starting to learn about DeFi and Ethereum and you know excited to learn with The Defiant, whereas before it was just like more people who were already in the space. So, yeah, it seems like we’re getting kind of an influx of new people.
Laura Shin:
That’s great. You also said in The Hidden Forces podcast overtime show that you think one trend that we’re seeing in Crypto Media is people prefer to follow individuals rather than institutions, and I wondered coming from a traditional journalistic background where obviously like we try not to state our opinions or we try not to become the story, how are you dealing with becoming more synonymous with your brand or your publication?
Camila Russo:
Yeah, it’s been like a weird transition, and it’s something that I wanted to do, to be able to express my own opinion and just be my own agent. At Bloomberg I kind of struggled with that, especially because I was obviously a lot more interested in crypto and much more bullish in crypto than most people at Bloomberg, so I always kind of found that struggle with my editors who like wanted to post the story one way, but I was like, no, like that’s not really what’s going on.
So now it’s great to just be able to cover the space how I see it and not have to like ask for permission to go to like all these different events and like even go to…on your podcast I would have had to go through like three layers of like permission, so it’s so great to just be able to say yes to everything.
But at the same time, like I said, because I wanted The Defiant to be a journalistic platform it’s not, you know…it includes my opinion, but it’s…I try to be a lot more measured with it. If I have an opinion I’m always going to back it with facts. It’s not like, oh, I love this thing because…because, you know, and you should use it. It’s not like this is great because it has like…it’s tons of volume, it has never been hacked, it has audits and whatever, like I’m going to provide more substance to whatever my opinion is.
But yeah, it’s something that I’m still kind of figuring out what the right balance is of, like me being the figure for The Defiant versus having kind of the brand. It takes the front state, and I think it’ll be kind of a transition that will just have to happen organically with time as I bring in more contributors, and you know The Defiant starts being The Defiant and not like Cami Russo’s project, you know?
But you know, we’ll see. I think for now I’m happy to be kind of the fact of it, I’m like pushing it, I like use kind of my, I don’t know, whatever influence I have in this space to build out the brand, but I think hopefully you know with time The Defiant will become a bigger brand than my own brand.
Laura Shin:
And along the way you’ve launched something called the CAMI token. Tell us what that is and how people can use it or earn it.
Camila Russo:
Yeah. Well, I think it’s just part of me testing these things out as I report them. And this is something else that’s different from reporting at Bloomberg because at Bloomberg we were very restricted in owning the things that we cover, and rightly so I think, but that like was so strict that I couldn’t even…like it was hard for me to own even a little bit of crypto to test all these platforms out, but now I have more freedom to do that and I’ve been using that to test different DeFi platforms and NFTs and all this stuff. So, that’s what kind of the idea of CAMI tokens came from.
I was covering…I wrote a post on Roll which is the platform that facilitates the issuing of your own personal tokens, and at Bloomberg I actually had wanted to do like my own ICO in the ICO bubble just like I had to do like a fun story like what it actually takes to do an ICO, but like, yeah, obviously I wasn’t allowed to because like everyone freaked out like you’ll go to jail, you’ll get us sued, so I couldn’t do that.
But now with Roll and like these personal tokens I was able to finally have a CAMI token and yeah, it was just like more of a way to test how these things work, and it was like actually super easy, like in your face it’s just, you know…how…like what’s your token’s name, how many tokens do you want to issue, and building kind of use cases for the token.
So I haven’t been like paying that much attention to it, but my idea was that people would be able…that first I could reward my readers and audience with the tokens. So, if you were recommending The Defiant or like tweeting about it or like tweeting about my book I would send them CAMI tokens. And then the other side of the market would be like CAMI tokens could be used to buy things like a subscription to The Defiant, and I think so far one subscription has been bought by Julian.
Laura Shin:
Julian Wong.
Camila Russo:
Yeah. Yeah. So yeah, it hasn’t been like an exactly active market, but it’s been fun to test it out. I should give it more of my attention.
Laura Shin:
And did you do any kind of legal work to make sure that the different use cases you had for it didn’t run afoul in securities laws?
Camila Russo:
Well, I did talk to some…to a couple lawyers about like personal tokens and where that line is, and you know as long as you’re using them to exchange like actual things they’re more like airline miles, but I think that line is crossed when you’re promising like huger profits that come from your work, like when it’s like more like a dividend kind of thing, that’s where it becomes trickier. But if you’re just, you know, using these tokens in exchange for a subscription or in exchange for like an hour of my time then it’s like safer.
Laura Shin:
And I also saw you participated in some of the gitcoin grant rounds.
Camila Russo:
Yeah.
Laura Shin:
Describe that process and what you’ve been getting grants for.
Camila Russo:
Yeah. I think what they’re doing is really amazing in enabling funding for different Open Source and like Ethereum projects. I think, you know, what makes it gitcoin grants work is this idea that with donating a little bit of money, of crypto, you can actually make a big impact. So that because of the matching, so that really kind of incentivizes people to donate even, you know if it’s one DAI. Because of like how the system works, you actually end up donating a lot more.
So, that’s kind of generated this like feedback loop of like everyone in Ethereum donating to these grants. And yeah, I started…I made the first grant in the previous round. That’s when they opened it to like media projects, and it was really great. Like I got over 4,000 DAI in the grant and I’ve been using it to compensate my contributors, so it’s been like really instrumental.
And then this time around I also got close to 4,000 DAI in donations, and I want to use that to help build out part of my website. So, yeah, it’s…I think in general the whole kind of experiment in these types of funding rounds generates this like sense of community that you’re all kind of helping each other, building for each other. So, yeah, we’ll see. I think I’m doing it quarterly, feels like it’s helping these projects be like more sustainable.
Laura Shin:
In general, how do you think media companies can take advantage of crypto tokens or decentralized business models?
Camila Russo:
That’s interesting. I think this, you know, there’s a lot of work to be done in this space. I don’t think anyone has like really figured it out yet. But you know, like one of the like big ideas and kind of Holy Grail ideas for like media and crypto is this kind of model where users pay, like make micro payments for like reading single articles or this idea of like streaming content as you would stream music or video.
So, I think…I don’t think that’s been achieved yet, but that would be like an interesting model to try out. You know it would require like kind of everyone being connected and like very cheap transactions, so potentially like in some like Layer 2 channel or something it could work out. But yeah, that’d be interesting. a lot has been…Unlock protocol is this project that’s focused on like media subscriptions with crypto, and they’ve been working on this idea of like unlocking content with crypto so that’s another way.
For now, you know, for me personally it’s been a way Unlock has allowed a way to give crypto subscriptions where, you know, substack hasn’t yet. So it’s like very basic. It’s just like subscriptions but with crypto, but at least you know that’s…you know, I’ve been able to implement that. But yeah, I think going forward this idea of like streaming content is where crypto can make a big impact.
Laura Shin:
So, let’s now talk again about Ethereum because obviously we have this five-year anniversary coming up. You recently tweeted that the total market cap of ERC-20 tokens is now higher than the market cap of Ethereum. What do you think is the significance of that fact?
Camila Russo:
Yeah. I think, you know, there’s…what this obviously means on itself is that the economy being built on Ethereum is now more valuable than the token securing it, so it’s more valuable than ETH itself and you know, that really signals the amount of innovation going on, on top of Ethereum. That’s one way to look at it.
Another way to look at it is, wow, ETH is really undervalued because of like the platform should be more valuable than the applications on top, but you know that’s a thesis. It’s a hypothesis that’s yet to be proven, so it’s you know…it’s been kind of assumed that in blockchains because the underlying Layer One can now be made valuable with its own token, that this would allow the like Layer One, a protocol layer, to gain in value as applications are built on top.
And I think you know, that’s different from non-tokens like from Layer One protocols that don’t have tokens, like obviously the internet is like the best example. And so, the idea there is that if the internet, like the TCP/IP protocol had had a token that token would be more valuable than all of the applications built on top, but because it didn’t have a token, like nobody could actually profit from this network, right?
And so, that’s the difference that blockchains are built into the table that now these Layer One protocols can actually be made sustainable and people can invest in these protocols, and that these tokens will become the most valuable. So I think it’s interesting that with tokens on top of ether becoming more valuable, this theory is being challenged, so I don’t really…I don’t know if it’s the case that, you know, that that theory was wrong and that really the tokens on top of Ethereum can be more valuable than ether itself, or that ether is undervalued and it just like needs to catch up.
Laura Shin:
Yeah, I wonder if it might switch back once we move to Proof-of-Stake or once Ethereum moves to Proof-of-Stake.
Camila Russo:
Right. Yeah, maybe kind of the economics of Proof-of-Work aren’t kind of keeping up with the actual value of ether, and once people start locking ETH up to stake, it will. We’ll see.
Laura Shin:
Yeah. And just going back to DeFi, there have been so many hacks in the DeFi space, how do you think about balancing your coverage of the risks against like who your readers are and the fact that they’re interested in DeFi?
Camila Russo:
Yeah. No, I think to me covering the hacks is probably the most important thing that I can do because everyone else is going to be covering how great the space is, you know? We have the projects themselves doing that. You have like their press releases, you have their tapes. You have like all these other newsletters covering you know like kind of cheerleading for the space, which they’re great, but I think you need to balance that out with a more kind of objective view and you know, just finding out the good and the bad, and the hacks are definitely the bad.
So I think, you know, it’s really important for…especially for new readers to realize the level of risk that there is here, and there is definitely really high risk in DeFi from code breaking which it does, to just the volatility of the market, how liquid it is. So yeah, there’s just risks everywhere.
And I always say, you know, as excited as I am for DeFi and Ethereum these things are…you know, DeFi is just like two years old. You know, how long…how many years did the financial system take to be as secure as it is today? We’re just like in the very, very early stages. This code needs to be tested, it needs to be audited. There needs to be some sort of like protection for users I think. So I mean the main thing I say is I encourage people to check these things out, but with money that they can afford to lose. I think it’s kind of the safest advice.
Laura Shin:
For sure.
Camila Russo:
Yeah.
Laura Shin:
And so, for the next let’s say year, do you have any predictions in DeFi or are there any particular metrics that you’re keeping your eye on, or projects or trends?
Camila Russo:
Let’s see. Well, I think like value lock is like the main metric that people are looking at. But in terms of like trends, I’d love to see more like DeFi becoming more secure, and I think that should be a big focus and I think it is. So, there are projects like Nexus Mutual building insurance for DeFi. Others like Open building, kind of hedging options, like hedging contracts for DeFi. So, hopefully a big trend in DeFi will be different ways to protect traders and users.
Another trend I hope to see, which I think has been very much missing, is identity systems. I think the ability to have like decentralized identity will unlock so many other new use cases which might enable kind of greater adoption beyond crypto whales, and you know specifically the ability of having laws that require less collateral than they do now because right now borrowing DeFi requires you to put capital up front, and so that right off the bat excludes a bunch of people who just don’t have that capital.
So, having some sort of credit system, some way of like verifying payment history, that would really kind of…unlocks so much more value and use cases and ecosystems, so hopefully that’ll be a trend to look forward to.
Laura Shin:
And what about decline on Ethereum?
Camila Russo:
Oh, yeah.
Laura Shin:
What are you looking for, yeah, as you watch that?
Camila Russo:
That’s such an interesting trend. So, yeah, Bitcoin and Ethereum has really skyrocketed and it’s been interesting to see. There’s actual demand from Bitcoin holders to put their Bitcoin on like smart contracts or deposits and using Ethereum tokens instead on Ethereum.
So I think this will be…this will continue to grow as DeFi becomes more useful and secure more Bitcoiners will want to start using these applications, and I think that will be the case with other non-Ethereum tokens. And even with like maybe like real…like token as real-world assets. There’s this idea that Ethereum will start kind of sucking in assets into the platform. I think the first one is Bitcoin, but going forward I’d expect all types of assets to start kind of participating in DeFi.
Laura Shin:
Yeah, it’s definitely a fascinating space. I think it’s really great that you carved out this niche to cover because you’re right, it’s easily one of the most interesting beats within the overall crypto beat.
Camila Russo:
Yeah, I agree.
Laura Shin:
Yeah. Yeah. Well, it’s been so great having you on Unchained. Where can people learn more about you, The Defiant, and The Infinite Machine?
Camila Russo:
Yeah, it’s been so great, Laura. Thank you. I loved the conversation. So The Infinite Machine, you can order it on Amazon. If you go to Harper Collins’ website and search for The Infinite Machine you’ll see all the resellers there beyond Amazon. I’m always on Twitter at CamiRusso. And The Defiant is thedefiant.substack.com if you want to subscribe. So, yeah.
Laura Shin:
Perfect. Well, thanks so much for coming on Unchained.
Camila Russo:
Yeah, thank you. It was my pleasure.
Laura Shin:
Thanks so much for joining us today, and to learn more about Camila, The Infinite Machine, and The Defiant, check out the show notes for this episode. Don’t forget you can now watch video recordings of the shows on the Unchained YouTube channel. Go to youtube.com/c/unchainedpodcast and subscribe today.
Unchained is produced by me, Laura Shin, with help from Anthony Yoon, Daniel Nuss, Josh Durham, and the team at CLK Transcription. Thanks for listening.
